I'm the Founder and Managing Partner of Ironfire Capital LLC, which runs a tech-focused hedge fund and angel fund. I did a Ph.D. in Management at the Columbia University Graduate School of Business in New York, with a specialization in Strategic Management. You can follow me on Twitter @ericjackson, subscribe to me on Facebook, follow me on Sina Weibo, or Circle me on Google+. My email is: dr.eric.jackson@me.com

5 Differences Between Tim Armstrong at AOL and Marissa Mayer at Yahoo!

Now that we are 6 hours removed from the official news of Marissa Mayer joining Yahoo! (YHOO) as CEO, we can stop reading the immediate reaction pieces that all repeat each other.

Maybe at the 4 hour mark after the news broke, we started to see some people make the comparisons between Marissa and Tim Armstrong at AOL (AOL). Some folks merely remarked that ex-Googlers now are running a bunch of other Internet companies. Some seemed to be suggesting that, if it wasn’t easy for Tim, it sure won’t be easy for Marissa.

But there are some big differences between Armstrong and Mayer and the two companies they’re now associated with including:

1. Tim was a sales guy and Marissa comes from product. I think Tim’s done a lot of smart things at AOL, especially in the last year, but Marissa should have a much bigger advantage over Armstrong in revitalizing Yahoo!’s core product set.

2. AOL draws a significant amount of its EBTIDA from its declining dial-up business. It’s getting smaller every year but AOL still gets a big chunk of its EBITDA from folks in the heartland still paying $20 a month for ISP access to the internet.

3. Yahoo! has 700 million monthly visitors. AOL has 111 million. Remember those rumors floated a year ago that AOL was going to “merge” with Yahoo!? That was hyper-wishful thinking emanating out of Tim Armstrong’s office.

4. Yahoo! has $1.4 billion in trailing twelve months EBITDA. AOL has

Image by AOL via CrunchBase

$300 million. And Yahoo has over 15,000 employees including full-time contractors compared to AOL’s 5,000.

5. On an enterprise value – to – EBITDA basis, AOL is valued 50% higher than Yahoo! (net of the Asian assets and cash) at 6.6x vs. 4x. So, Yahoo! is still cheap, compared to AOL, which is cheap compared to any other Web company.

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